Obama administration delays small business exchange again; won’t be ready until late 2014


On Oct. 29, CMS Administrator Marilyn Tavenner said that the SHOP exchange would be fully ready by the end of November. Now CMS officials won’t say whether that is still the plan. (Chip Somodevilla/Getty Images)
November 27, 2013

The Obama administration is once again delaying the launch of an online small-business health care exchange, pushing the deadline back a full year to November 2014, according to an internal memo obtained by On Small Business.

Consequently, instead of enrolling online through Healthcare.gov, small employers will have to apply through an agent, broker or directly through an insurer to enroll in plans through the new federal marketplace, for at least the next year. Department of Health and Human Services officials say the changes are meant to allow business owners to apply for coverage offline while the agency continues to make improvements to the Web site.

As late as Tuesday, officials said they were still exploring all options with regards to the online small-business marketplace, often called the SHOP exchange.

“We’ve concluded that we can best serve small employers by continuing this offline process while we concentrate on both creating a smoothly functioning online experience in the SHOP Marketplace,” the agency’s Centers for Medicare & Medicaid Services wrote in the memo distributed to health law stakeholders.

Related: Why the delays matter so much to small businesses

This marks by far the longest in a string of delays for the federal government’s employer marketplace — and elected officials and small business leaders are growing frustrated.

“In the midst of the angst and uncertainty that small businesses and Americans feel about Obamacare, today’s news of yet another last minute delay is just more proof that the law is unworkable and bad for small businesses,” Rep. Sam Graves, chairman of the House Small Business Committee, said in a statement, adding that, “if small firms failed to provide services this frequently, they would be fired.”

John Arensmeyer, chief executive of Small Business Majority, a lobbying group, said the federal marketplace still offers competitive prices for employers willing to enroll through the available channels — but he acknowledged the importance of a functioning Web site.

“It’s disappointing that the online portion of the federal small business marketplace through Healthcare.gov will be delayed and it’s important it get up and running as soon as possible,” Arensmeyer said in a statement.

The small-business site in the complimenary piece to the individual exchange, where technical problems have been well documented. Originally, both exchanges were supposed to open with full functionality at the start of October.

However, in the days leading up to the launch, HHS officials announced that, for the first month, employers hoping to enroll in plans through the small-business site would not be able to complete the process online; instead, they would have to mail or fax forms to the agency for processing.

It was a blow to employers who had been told the Web site would allow them to shop for health insurance the same way they shopped for flights or hotels on Priceline, Expedia and other Web sites. But that delay was only supposed to last a month — at first.

On Oct. 29, though, CMS Administrator Marilyn Tavenner revealed a second delay during a congressional hearing, noting that the Web site would not be fully ready until the end of November. Agency media officials later confirmed that “all functions for SHOP [Small Business Health Options Program] will be available in November;” not necessarily at the start of the month, but at least before December.

December 2013, that is. Now, small business owners are looking at December 2014.

“This new delay announcement is a disappointment but not a surprise,” Dan Danner, National Federation of Independent Business, said in a statement. “Small businesses continue to be low on the priority list during the Obamacare implementation process,”

Danner later added that the “it probably matters little to people in Washington that the failure to get the small business exchanges online adds yet another onerous paperwork requirement for job creators.”

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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